The nation's interbank lending rates eased to an average of 10.25 per cent this week, from 10.66 per cent last week due to a big cash inflow from matured treasury bills, traders said on Thursday.
(http://www.channelstv.com/home/wp-content/uploads/2012/10/Interbank-rates-300x181.jpg) (http://www.channelstv.com/home/wp-content/uploads/2012/10/Interbank-rates.jpg)They said over N260 billion ($1.6 billion) were repaid this week, boosting liquidity to help lower the cost of borrowing between banks.
"We have over N500 billion cash balance," one dealer told Reuters, pointing out that the interbank market opened on Thursday with a cash balance of about N240 billion in addition to the N260 billion from matured treasury bills.
Traders said the Central Bank of Nigeria (CBN) withdrew debt notes initially offered at an Open Market Operation (OMO) owing to a disagreement on yield levels because the market was awash with cash.
The secured Open Buy Back fell to 10.1 percent, from 10.50 percent last week, 1.9 percentage points below the central bank's benchmark rate of 12 percent. Overnight placement eased to 10.25 percent against 10.6 percent, while call money fell to 10.40 percent compared with 10.75 percent last week.
Traders said borrowing costs will likely remain stable next week because more repayments were expected from matured treasury bills.
Financial markets in will be closed on Friday for an Easter bank holiday and reopen next Tuesday.
Via: ChannelsTV